Developers Aim to Bring Ethereum’s Restaking Success to Bitcoin

DeFi developers are striving to replicate the rapid growth seen in Ethereum’s restaking sector within the Bitcoin ecosystem.

On May 20, BounceBit, a CeDeFi Layer 1 network backed by the popular exchange Binance, unveiled its 2024 roadmap. The roadmap includes plans to create a “shared security client module” that allows third-party projects to utilize the liquidity on the “BounceBit BTC restaking chain.”

BounceBit, which launched its mainnet on May 13, reported a total value locked (TVL) of over $1 billion after an incentivized early access phase began on January 30. The network is secured by users staking both its native BB token and Bitcoin (BTC). The new roadmap aims to enhance this by enabling third-party protocols to leverage BounceBit’s staking mechanism for additional security.

Other key points in BounceBit’s roadmap include improving the Ethereum Virtual Machine (EVM) execution, increasing transaction throughput, and enhancing communication between its EVM and the Cosmos software development kit.

The Restaking Boom

Restaking, pioneered on Ethereum by EigenLayer, allows Ethereum stakers to earn extra yield by securing third-party actively validated services (AVSs) in addition to the Ethereum network. However, restakers face increased slashing risks if the delegated AVSs misbehave.

EigenLayer has quickly become the second-largest DeFi protocol with a TVL exceeding $15.3 billion, fueled by the rise of liquid restaking tokens (LRT) protocols. These protocols lower the barriers to restaking and enable additional yield generation while maintaining liquidity.

Projects Using Babylon for Bitcoin Restaking

BounceBit isn’t the only project eyeing Bitcoin restaking. Several initiatives are leveraging Babylon, a Cosmos-based Bitcoin staking network, to create BTC-based restaking products.

Babylon allows Bitcoin holders to “stake” their BTC to secure Proof-of-Stake (PoS) networks in exchange for yield. On May 16, Mind Network, a restaking-focused Layer 1 network, announced a strategic partnership with Babylon, enabling users to secure Mind-based sub-networks by staking Babylon-based LRTs.

Earlier, on May 2, Bedrock, an LRT protocol, launched uniBTC, a Babylon-based Bitcoin liquid restaking token. UniBTC lets BTC holders participate in Babylon staking without locking up their assets, maintaining liquidity while securing PoS chains. Similarly, on April 1, Lorenzo protocol introduced stBTC, another Babylon-based Bitcoin LRT.

These developments mark significant steps in the evolution of Bitcoin restaking, aiming to bring Ethereum’s restaking success to the Bitcoin ecosystem.


Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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